The Central Board of Direct Taxes had issuedCircularNo. 23 (hereinafter called “theCircular”) on 23rdJuly 1969 regarding taxability of income accruing or arising through, or from, business connectionin Indiato a non-resident, undersection 9of the Income-tax Act, 1961.

2. It is noticed that interpretation of theCircularby some of the taxpayers to claim relief is not in accordance with the provisions ofsection 9of the Income-tax Act, 1961 or the intention behind the issuance of theCircular.

4. Even when theCircularwas in force, the Income-tax Department has argued in appeals, references and petitions that-

(i) TheCirculardoes not actually apply to a particular case, or

(ii) that theCircularcan not be interpreted to allow relief to the taxpayer which is not in accordance with the provisions ofsection 9of the Income-tax Act or with the intention behind the issue f theCircular.

It is clarified that {he withdrawal of theCircularwill in no way prejudice the aforesaid arguments which the Income-tax Department has taken, or may take, in any appeal, reference or petition.